USA Minimum Wage Increase 2026: What Changes on February 1
On February 1, 2026, a range of minimum wage changes take effect across the United States. These changes come from state laws, city ordinances, and automatic indexing formulas. They affect hourly pay, overtime calculations, tipped workers, and some benefits that tie to the minimum wage.
This guide shows how to find new hourly pay rates, update payroll systems, and calculate net pay for affected workers. Use the steps below whether you are an employer, payroll manager, or an employee checking your paycheck.
Which workers and places are affected by the minimum wage increase 2026
Not every worker will see a federal change on February 1. Many updates are local or state driven. Common situations where rates change include:
- States with scheduled increases or indexing tied to inflation.
- Cities and counties that set their own minimum wages higher than state or federal levels.
- Employers who voluntarily adopt higher minimums for retention and compliance.
Examples of affected workers include hourly staff, part-time employees, and some seasonal workers. Exempt and salaried roles often remain unchanged unless state law alters exemption thresholds.
How to find the new hourly pay rates for the USA Minimum Wage Increase 2026
Follow these steps to confirm the correct rate for a worker in a specific location.
- Check your state labor department website for official announcements and effective dates.
- Look up city or county ordinances if the business is in a major metro area.
- Review employer policies and union agreements that may set higher floors.
- Use official federal resources to confirm federal baseline rules and tipped minimums.
Keep a central reference file with URLs and copies of local ordinances for your payroll team.
How to update payroll and calculate new hourly pay rates
Updating payroll requires careful checks to avoid underpayments or incorrect withholding. Use this checklist.
- Update base hourly rates in payroll software by location and job class.
- Adjust overtime calculations if the wage change affects salaried exemptions.
- Recalculate tipped wage credits if applicable under state rules.
- Run parallel payroll tests before the first pay run after Feb 1.
Basic calculation example for hourly pay: New weekly pay = new hourly rate x hours worked. For overtime, use the new hourly rate to compute time-and-a-half for hours over the overtime threshold.
Small case study: Updating pay for one employee
Case: Maria works 40 hours per week as a retail associate. Her hourly rate is scheduled to increase from 12.00 to 13.50 on Feb 1.
- Old weekly pay = 12.00 x 40 = 480.00
- New weekly pay = 13.50 x 40 = 540.00
- Net change per week = 60.00, annualized = 60.00 x 52 = 3,120.00
This payroll team updated the rate in the system one payroll cycle early, ran a test payroll, and confirmed payroll taxes and benefits deductions recalculated correctly.
Practical steps for employers before February 1
Employers should act early to avoid compliance issues and staff disruption. Follow these key steps.
- Audit all job locations to identify applicable minimum wage rates.
- Notify affected employees in writing of the new rate and effective date.
- Update timekeeping and scheduling systems to reflect new pay codes.
- Train managers on how to handle questions about earnings and deductions.
Document decisions and maintain copies of legal references to show good-faith compliance if audited.
Practical tips for employees affected by the USA Minimum Wage Increase 2026
If you are a worker expecting a rate increase, confirm the following before Feb 1.
- Get a written confirmation of your new hourly rate and effective date from your employer.
- Check pay stubs after the change to confirm accurate hours and rate application.
- Ask payroll about potential changes to tax withholding and benefit deductions.
Keep copies of pay stubs and communications in case of discrepancy.
Common questions about the USA Minimum Wage Increase 2026
Will federal minimum wage change on Feb 1?
Unless Congress enacts a federal law, the federal minimum wage remains as previously set. Most Feb 1 changes come from state or local actions or employer policies.
How do tipped wages work with new rates?
Some states allow a lower cash wage for tipped workers with a tip credit. If the base or tipped minimum changes, employers must recalculate tip credit and ensure total earnings meet the applicable minimum.
What if my employer pays less than the new rate?
Contact your state labor department to file a complaint. Keep pay records and communication that show underpayment. Many jurisdictions offer back pay remedies and penalties for violations.
Use this guide as a practical checklist to prepare for the USA minimum wage increase 2026. Confirm the exact rates for your city and state, update payroll early, and communicate clearly with employees to ensure a smooth transition on February 1.
